In Search of the Thousand Dollar Video Game

Last night Keen saw fit to retweet this gem, which is the sort of statement than makes me shake my head in dismay.

There it is again, the false comparison between lattes and video games, with a game dev angry that people are not paying enough for his product.  Even the go-to comic from The Oatmeal to cover this is more than five years old now. (Clicking on the image will bring you to the full comic, complete with the coffee comparison.)

The comedic exaggeration of the concept

The argument here, salted with jealousy, seems to be that all luxury goods are equal, so your baseline for deciding where to spend you money should be solely factored on the value one gets in return.  In that world, the fleeting experience of a latte pales in comparison with the many hours of enjoyment a video game can bring.

Except, of course, that is specious at best and more akin to complete bullshit for most people.

The buying decision for a latte is never formulated as “What is the best value for my money today?”  In my experience the situation is more akin to, “I NEED coffee NOW!”

I don’t actually drink coffee, so I might not be the best person to make that assessment, but that is what it looks like from the outside.  I have seen developers get panicked and upset when they mislay their coffee mug and I am keenly aware how often we have to stop at Starbucks so my wife can get her favorite coffee beverage. (She prefers a “soy caramel macchiato,” which might as well be a magic incantation so far as I am concerned.)

Anyway, video games likely never come into the buying decision.  The latte experience is so different and so removed from video games that comparing the two is… well… I already used the words “specious” and “bullshit” didn’t I?  That.

So whining about people buying lattes instead of your video games is just a self-serving attempt to blame other people, including your customers, for your own problems in a cheap attempt to milk some guilt out of them.

And what are your problems if you’re a video game developer?  I think a lot of that has been covered elsewhere.  But then there is the video game market itself.

The video game market is overloaded with choices, most of which are uninspired imitations or direct knock-offs of worn-out concepts we’ve seen many times before hidden behind a series of horrible user interfaces that defy people to actually find the gems in the huge steaming stack of dung that is the video game market.

Imagine if Starbucks was run like Steam.

You’d have thousands of different lattes, each with a name that might or might not relate to what was actually in them, vaguely described, with mashed-up references to sub-genres of coffee drinks.  You would have to order them from a computer screen where you could only see 20 or so at a time.  Oh, and some of them aren’t compatible with your coffee cup, while others say they might be, but probably require you to upgrade your cup in order to enjoy them fully.

How is that for an analogy?  Let’s push it even further.

You can… slowly… look at latte reviews, but some of the positive ones are from people who were given a free latte, while some of the negative ones involve aspects outside of the latte experience.

Meanwhile, every previous latte you ever ordered from Starbucks is still available to you.  You can look in your latte library and see them all.  There are some in there you really liked, but probably a lot more that you barely even took a sip from.  Sure, you might be a bit tired of the ones you like, but they are reliable, certainly more palatable than most of your attempts to find a fresh new latte.

Oh, and then there is the Starbucks Summer Latte Sale and the Starbucks Winter Latte Sale, during which many lattes are marked down from 25-to-75%.  If you aren’t dying for that specific latte right now, you can wait and it will probably be cheaper.  Seems like a good idea, unless all of your friends are simply raving about some new latte.  You’ll buy that one right away.

I’m tempted to bring GameStop into the picture and examine the situation where you can return your latte for credit on a new latte, but I think I have pushed the envelope of absurdity far enough to make the point that comparing video games and lattes is an argument for the dim, desperate, or drunk.

While I too scoff at people putting down five bucks for a latte, connecting that to video game sales seems ludicrous.

Instead, they are a form of entertainment.  Video games are fun, not food.

As such, they compete with other forms of entertainment.  Here, the original tweet claims the entertainment value for video games should be $20 an hour.

That would make video games a pretty expensive form of entertainment.  My immediately to-hand similar comparisons:

  • Movies – $20-25 per person for 90-180 minutes of entertainment, including popcorn and a drink.
  • Books – $12 for a paperback, $30 for a new release hardback, 4+ hours of entertainment
  • Audiobook – Varies, but I just wrote about an $18 book that is more than 7 hours of entertainment
  • TV – Even being gouged by Comcast, probably close to a dollar an hour as much as our TV is on
  • Netflix – $12/month, used enough to be under a dollar an hour
  • On Demand – HD movie, 90-180 minutes, anywhere from $4-12, whole family can watch

At $20 an hour, the value proposition for video games doesn’t look so hot.  When you’re argument is undercut by Comcast, you’re on the wrong side of history.

Which is not to say I do not see the entertainment value in video games.  My Steam library runneth over, my history with them goes back more than 40 years, and I write a video game blog for Pete’s sake.  I love video games.

But if you think playing the bitter game dev, shaking your fist at your customers (and potential customers) and blaming them for not giving you what you feel you deserve, I have to say that you’re not doing yourself any favors.

And, after all of that, I have to admit that I did find a video game that hundreds of thousands (if not millions) of people have paid over $1,000 to play.

It is called World of Warcraft.

I know I have spent more than that much, counting the base game, the expansions, subscription fees, and the occasional cash shop item.  Blizzard was just smart enough to not ask for all the money up front.

Of course, the Gods of Irony must be paid their due.  This shining example of a video game that many, many people are willing to spend that much money on… is the sort of game he disdains in a subsequent tweet.

So most gamers just give up and keep playing League of Legends or World of Warcraft and forget about trying to find anything new.

There is the problem.  It isn’t that we’re not willing to spend that much money on a video game.  It is that we’re not willing to spend that much money on the “right” video game.

I think somebody in the comments on the corrupt developer post made the music comparison.  A lot of people want to get into music, be a rock star, and live the lifestyle.  But there is only so much room at the top.  Likewise, in the video game business you get a few really successful games, and a few devs rich enough to afford to become space tourists, while the rest labor on, never achieving fame or fortune.

Anyway, cranky rant over.  I’ve been down this path before, more than once.  It is a pet peeve of mine.  Keen posted about this as well in his more optimistic tone.  You might prefer that.  I’m just too jaded to buy this sort of blame shifting.

22 thoughts on “In Search of the Thousand Dollar Video Game

  1. The Alien

    $1000 video game… Sure. You walk into a store, a friendly person greets you, finds out in exacting detail what you want in a video game, then they make it for you exactly the way you want. Also, I am not a coffee drinker either, but does anyone drink four lattes per hour?

    I still buy new games at full price in some cases.

    To push the coffee store analogy a bit, if you pick up your drink, take a sip and then do a spit take and shout “What the hell? I said no microtransactions!” will they make you a new drink?

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  2. SynCaine

    Not falling for it, we all know he is making tons of money via RMT anyway, just like the rest of them.

    Also some of us aren’t back to LoL or WoW, because we are playing PUBG, you know, that new game that just crossed 8m units sold in EA. Maybe work on making something like that, and spent less time bitching on Twitter?

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  3. Klyith

    To continue the “what if Starbucks was like Steam”…
    Imagine that being part of the coffee industry was, to a number of coffee enthusiasts, the most rewarding thing ever. Hundreds of 20-something coffeeheads are quitting their jobs and spending their life savings to move to columbia and be a bean farmer. Starbucks barely pays their employees, who also work overtime for free, but they’re still under pressure from the charity coffee kitchen that does “coffee bundles”.

    Wunderkid teens are constructing greenhouses in their parent’s backyard to grow beans in Wisconsin, then give away their 100% homemade coffee to strangers. Or ‘modding’ a ordinary Mr Coffee drip into a $5000 La Marzocco, somehow.

    Meanwhile, all the coffee fans who aren’t making coffee themselves are doing things like buying a coffee, taking one sip, then tossing the cup because there’s another coffee being put in front of them. Hell, some of them barely have the time to drink any coffee themselves, but they still buy that coffee they watched their favorite twitch.cf steamer sip and talk about.

    And the internet is full of bitter ex-baristas complaining that nobody will pay more than a nickel for a cup of coffee, damn it don’t you people *like* coffee?

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  4. anypo8

    Imagine that a barista could make and deliver to your home an arbitrary number of copies of a given latte, at a cost of five cents per copy to the barista. Even if building that first latte cost a million dollars, I doubt the barista would end up being able to charge $5 for them.

    Starbucks sells around 20 million Pumpkin Spice Lattes per year
    (https://www.quora.com/How-many-Pumpkin-Spice-Lattes-does-Starbucks-sell-each-year). To amortize the development cost of the Pumpkin Spice Latte over one year (really quickly by industry standards) in our hypothetical world, Pumpkin Spice Lattes would have to be sold for about 10 cents. To make a ridiculous 200% profit our barista would charge 30 cents.

    So how much does a Starbucks latte cost to make and deliver in the real world? A $3.65 Cappuccino Grande costs Starbucks about $3.05, for a profit margin of 60¢ (http://coffeemakersusa.com/pricing-breakdown-cup-coffee).

    (By the way, the Internet is a ridiculous source of information. Those links were first-page hits on the obvious Google searches.)

    The other examples in that Oatmeal cartoon you linked are similar. MMOs need ongoing revenue because they have ongoing costs. Conflating revenue and profit is an idiot’s game.

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  5. Pasduil

    The Starbucks comparison always irks me too.

    It’s not only devs that use the argument, people use it to justify things to themselves too. If you *want* to buy something you can always tell yourself “Hey, I’d spend more on getting a latte and a sandwich, so it’s ok.” Or whatever other comparison makes the thing you want look good value.

    I could keep myself very well entertained with free books from the library, free-to-air TV and radio, etc. Not to mention YouTube, podcasts, etc. With games, I could go for years with one’s I’ve already paid for and barely touched. As a chessplayer, I can access excellent free chess servers that give me as much pleasure as any video game I’ve ever bought.

    Come to think of it, I’ve had many hundreds of hours of enjoyment out of the chess set I bought when I was 12, so clearly plastic chess sets should go for at least $4,000.

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  6. Hordling

    I think I’ve paid $1000 each for at least 2 video games. Wow and EVE. Wow 8 out of 11 years at $15/month > $1000 and EVE 2 accounts for 3 years > $1000. Yeah, I may start plexing those two accounts like I occasionally do my 3 skill farming accounts, but so far I’ve preferred the baseline paying for two accounts as I grow my trading capital. I avoid the most obvious gaming traps, no purchased pets/mounts/trading cards in Wow, and no skill injectors for personal use or skins that aren’t free, or PLEX for $$, in EVE but even so, those monthly fees do eventually add up.

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  7. Bhagpuss

    A++ rant!

    Funnily enough, I was just musing on the way into work today about how much money our household has given Daybreak Games (formerly SOE, nee Verant Interactive) over the last decade and a half plus change. I was pondering that because Mrs Bhagpuss finally gave consent to the closure of her All Access account, unplayed in five years, leaving us with just one AA account (and six F2P ones). The price of a sub has varied over the years but I estimate we’ve spent somewhere around $4500 on subs alone, not counting another thousand or two on expansions.

    Money very well spent in my opinion. Who can even guess how many hours we’ve played, but there were extended periods when we both played over 40 hours a week. As a form of entertainment it’s been incredibly good value and that’s not even accounting for the huge savings we’ve made by staying in and playing instead of going out and spending money as we did before we found EQ.

    As for coffee – I love coffee but I wouldn’t call drinking it “entertainment”.

    I have a really simple policy on “value for money”, which is this: if I want something and I can afford it I pay what it costs and that’s what it’s worth. That way, I get what I want, when I want it or else I go without, which is fine. Outside of the voluntary imprisonment of an airport, I have never wanted a coffee-house as much as coffee-houses charge for coffee. Also their coffee is swill, judging by the few I have been “forced” to buy at airports!

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  8. Wilhelm Arcturus Post author

    When I considered writing this post I was going to open it up with a quote from Pulp Fiction about the five dollar milkshake. My daughter and I watched that a few months back and now every time we go some place and order a milkshake I bring up that quote because these days five dollars is about the least you can pay for a milkshake. And then I started writing, scheduled the post, went to bed, and forgot all about that. Ah well.

    If you go and read that Twitter thread, he said a number of things that I could have run with, including that if you buy games on sale at Steam you’re not allowed to complain about F2P, early access, microtransactions, and game developers having to work crunch time. I’m still not clear how that last bit fits. Crunch time come from bad scheduling before anybody ever buys a copy of the game. Also, he claims to be more successful at buying video games than food, which is not exactly something I would brag about. But the bogus latte comparison seemed to be at the root of things and is, as noted, a pet peeve of mine, so I went with how absurdly different the market for a latte is from the market for a video game.

    With the $1000 video game I immediately thought of WoW and EVE Online, where I am in for more than that on both. Likewise, I might not be in for a grand on both EverQuest and EverQuest II, but combined I am well beyond that. I might be close on LOTRO as well, though if I am not it is because I put in $200 up front in 2007 for the lifetime subscription. However, I would not value any of those as worth $20 an hour to play. Anybody slinging around that measure of value is way off base, and I speak as somebody who paid $6 an hour to play Air Warrior and Stellar Emperor back in the 80s.

    Also, I managed to begin and end a run-on sentence with the words “the video game market.” That might be a first for me.

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  10. Whorhay

    Software is a digital good. Once the effort has been put in to create it the cost to replicate and distribute it is beyond negligible. The potential market for such things is also incredibly huge compared to any physical good. A coffee shop can only serve so many customers a day and it is limited by supply and capital investment in those supplies as well as the storefront and employees. A far better comparison is one video game to another. I paid $13 or so for a copy of Minecraft in it’s Alpha, and I’ve gotten thousands of hours out of it, under $10 for Terraria and a similar number of hours, D3 has cost me considerably more but still over a thousand hours. If a new game wants me to pony up anything close what I paid for those games they need to convince me I’ll get a similar value, either through playtime or mind blowing experience.

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  11. Pingback: ‘Value’ of MMO games | GamingSF

  12. Armagon

    I’m most outraged about the 5$ coffee. When I have to pay 4.5 EUR for a coffee I’m very grumpy. Maybe I should take that “2h refund window” on Steam a lot more, then maybe I’d be spending more money on games, because my default stance absolutely is “Nope, won’t buy” and it’s not primarily the price.

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  13. Wilhelm Arcturus Post author

    @Armagon – You must be worried from some previous exchange rate, because this morning 4.5 EUR is only $5.31, so the price gap isn’t all that big.

    I alluded to part of the Steam issue that I thought about chasing after more fully, but felt I had beat the topic half to death already, and that is the negative purchasing pressure having a library full of games puts on me. Even when something on my wishlist is marked down during a Steam sale, most of the time I still don’t buy because of “do I really need another game right now?”

    It is akin to having a new gaming console. When you have that new hardware you just want some games to play on it and you probably don’t consider cost all that much. Then you get some games and maybe you become a bit more selective. And then you have a bunch of games that you don’t play anymore staring at you and they can act as a brake on your purchasing… unless you trade your games back in at GameStop, which is part of their brilliance in that they remove glaring reasons for not buying another video game from your vicinity and get you to buy another game at the same time.

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  14. Armagon

    @Wilhelm, ok my point is: $5 should be nearly 2 coffees, give or take a few cents ;)

    On the one hand, as a software developer myself – yes of course you want to get paid to do stuff you like and then not sell it for peanuts. On the other hand, from a market point of view, if nobody wants to buy your stuff, maybe you shouldn’t create it. Or at least not expect to be able to live off of it. That might be sad, but that’s how it it.

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  15. Pasduil

    @Armagon… When things cost more to a consumer in Europe than in the US, a fair chunk of it is the effect of higher taxes, both directly via sales taxes, and indirectly via the effects on staff wages, rents etc. It’s like getting your coffee with a side-order of healthcare, a bit of univ tuition and some transport infrastructure bundled in.

    Americans get a lot of consumer products much cheaper, but then pay much more for other stuff that is free or subsidized in Europe

    @Wilhelm…

    > I still don’t buy because of “do I really need another game right now?”

    Yes. I was thinking in your coffee analogy, it’s like I’m walking down the street carrying a tray full of various coffees, and some guy comes up to me and says: “Hey, buy my wonderful new coffee! Only 99c!”

    It might be that what the market price signals are saying is: “The world does not have a burning need for any more smartphone games. If you want to get paid, go do something more useful.”

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  16. Armagon

    @Pasduil Well, yes, of course – but my point is that I am not buying coffee that expensive. I’ll just go next door for 2.50 one :P Not going to America or to a different country with low wages, just a block in the other direction.

    This coffee analogy is getting out of hand :) There’s a pain point for goods and I was simply (albeit phrasing it poorly) complaining that I don’t like 5$/€ milkshakes or coffees. For me that is like a 70-80 $/€ game – it’s just too expensive to enjoy. 60 is kind of doable because that’s what the market decided on.

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  17. Toldain

    I mostly agree with your rant, but it got me to wondering about something. If you work in the film industry as, for instance, a techie. You know, a film editor, or a sound technician or a sound editor, or something like that that’s pretty skilled, but has no star power. How does your income stack up with being a game developer for a studio? (As opposed to an indy).

    It seems as though it might be worse, but I don’t rightly know. If it is worse to work in the game industry, then why is that? These are really kind of similar industries, when you get down to it. There’s a lot of crossover in ideas and management. But film production is organized by project, and games form companies and pay salaries as if there were a steady stream of income, not a big burst of it.

    Of course, software is never finished, and that’s part of it. But this intrigues me. Why are these things so different?

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  18. Wilhelm Arcturus Post author

    @Toldain – The film industry is weird. I used to hang out with a union cameraman back in the 90s and his life was lots of free time, then stretches of work where he was essentially gone for anywhere from a week to a couple months. During that time he got paid very well… with overtime, food provided during the day every four hours, along with travel and accommodations paid for… and then came back and kicked around waiting for the next gig. But he was in with people there through family connections and was in the union.

    Making a video game, while it has its own complexities, isn’t drastically different than making other software. It is, as we all hate to hear, just software. Unless you’re Chris Roberts I guess, after seeing today’s Gamescom Star Citizen demo. Then it is a never ending tar ball of new features piled on top of an already optimistic project.

    Wait, that is exactly like many projects I’ve worked on. Never mind.

    Making a movie, at least in the union Hollywood style, is more like a battle campaign than making software. There is a lot of logistical work to be done that requires everything from big stars to renting trailers to finding an armorer to provide blank firing weapons to whatever. And Hollywood is structured to do this. The studios traditionally don’t have a lot of full time employees. Instead, the studio execs know and have access to thousands of various sub-contractors to do various things. And it is the “I know a guy who I can vouch for” sorts of relationships that make up the pyramid of movie making. Those millions of dollars in a film budget get diffused through many subcontractors, some of who get a mention in the credits directly, others you would only know of by their employees being mentioned in the credits.

    I remember when Sony bought Columbia pictures back in the 80s, back when we were so afraid of Japan, and people in Hollywood started laughing after the deal was done because all Sony got was rights to a library of films and whatever property Columbia happened to own. But for them to actually make a film, they still needed the whole infrastructure of Hollywood that is built on personal relationships.

    It is different with Pixar-like digital films in that they get made more like software. You don’t have to go on set to Ireland or Tunisia or Dubrovnik to get a scene. But they still require a lot of the traditional writing and editing skills.

    Anyway, more to your question, I found a few things online including this that might answer your question. In general it seems better than game industry salaries, an you live in LA where housing is cheaper… well, cheaper than here in Silicon Valley. But that doesn’t include being an indy or all the work it takes to break into the known circles. I have a niece who just finished film school and is in that pool. Did a stint for Will Ferrel at Funny or Die and is off to something else to prove herself, make contacts, and pave her career.

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  20. Brenden C

    This is one of the main reasons I love gaming a generation behind the times. Seriously I can go buy BioShock on eBay for next to nothing. Do you realize what a bargain that is? For about 5 dollars I can play an incredible video game story & have some really awesome memories as well. Pretty Damn good Investment if you ask me…

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